Euronext, the pan-European stock exchange operator, has recovered almost €100 million of the €167 million cost of acquiring the Irish Stock Exchange seven years ago by way of dividends.
The Irish Stock Exchange, which trades as Euronext Dublin, flagged in its latest annual financial statement that it would pay a €17.3 million dividend on year’s earnings, which rose even as revenues from share trading slumped after heavyweight company exits from the market.
That has brought the total amount of dividends handed over to its parent to about €98.5 million.
Revenues dipped 3.3 per cent to €36.8 million, according to the financial statement, filed with the Companies Registration Office (CRO). While revenues from share transactions declined as trading in Irish equities on the market slumped 30 per cent, income from debt and fund listings remaining robust.
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The average daily value of trading in Irish equities on Euronext Dublin slid to €179 million from €254 million as CRH, Flutter Entertainment and Smurfit Kappa (now Smurfit Westrock) dropped their Irish quotations as they moved their main listings to New York between September 2023 and July 2024. The Irish market has not seen an initial public offering (IPO) since 2021.
Euronext Dublin, led by chief executive Daryl Byrne, is the world’s number one exchange for listing bonds. During 2024, 11,574 debt instruments were admitted to listing on the company’s markets, leaving 43,560 such listings at the end of the year.
Some 137 new funding listings took place in Dublin last year, up from 114 in 2023, reflecting strong appetite for sustainable funds and exchange traded funds (ETFs), increasingly popular and generally low-cost types of funds that track everything from stock market indices to baskets of commodities.
The debt and funds listings businesses – offering steady streams of revenues – were the main attraction when Amsterdam-based Euronext acquired the Irish exchange operator in 2018 from a group of domestic stockbroking firms.
The Irish company’s pretax profit rose 11 per cent to €20.7 million, helped by a decline in service expenses from other parts of the Euronext group and increase in interest income from cash deposits with banks.
Euronext operates exchanges across seven European countries, from Oslo to Lisbon. The Irish unit had €20.4 million of cash on deposit with a range of banks.
Euronext Dublin and other parties from the capital markets ecosystem have been lobbying successive governments in recent years for help to reboot the domestic equities market, where the number of listed companies has slumped 60 per cent over the past two decades.
Of the remaining 25 listed companies, Dalata Hotel Group is set to be taken over next month by a Scandinavian consortium, while Malin Corporation and Donegal Investment Group are essentially in winddown.
Minister for Finance Paschal Donohoe announced in his budget speech last week that stamp duty on share trading in public companies worth up to €1 billion would be scrapped. However, a rate of 1 per cent will continue for larger companies, including nine companies currently worth more €1 billion on the Iseq All-Share index. Some of the larger names are viewed by industry observers to be the most inclined to follow the groups that have moved their main listings to Wall Street.
Euronext Dublin has also been calling in recent years for the establishment of a savings and investments account regime. Irish households currently have more than €160 billion of cash on deposit with banks, about 85 per cent of which is earning little or no interest in current and on-demand deposit accounts, according to Central Bank data.
Mr Donohoe said he will look at establishing a tax-efficient savings and investment accounts regime as part of a roadmap to be published early next year to encourage investment among individuals. The European Commission recommended earlier this month that governments across the union establish tax-efficient savings and investment accounts regimes.
